This got me thinking about what I expect to happen. Here are the options, along with my (admittedly wild) guesses about their likely implementation. They add up to more than 100 percent because I think the Greek government (aided and abetted by their German and French enablers) will adopt more than one of these options.

Indeed, the only option that is completely unrealistic is doing the right thing and reducing Greece’s bloated public sector.

My CYA disclaimer is that these are the probabilities for the next two years.

New Bailouts – 40 percent chance of additional funds from European taxpayers (via the European Union) and/or from world taxpayers (via the IMF).
Default to Private Bondholders – 25 percent chance of default (a.k.a., restructuring) of at least some portion of the money owed to private investors. This number would be higher if it wasn’t for the next options.

Restructuring of Prior Bailouts – 50 percent chance of an indirect bailout by restructuring existing loans from the European Commission and/or IMF.

Indirect Bailout from the ECB – 80 percent chance of additional purchases of Greek government bonds by the European Central Bank.

More Tax Increases – 65 percent chance of additional significant tax hikes. I’m tempted to make this 100 percent, but I think even the Europeans realize that Greece is probably on the wrong side of the Laffer Curve. As such, more tax increases would reduce revenues for the government.

Leave the euro – 10 percent chance that the government will abandon the common European currency. It may seem like I’m not giving enough consideration to this option, particularly since going back to the drachma would give the government the ability to screw bondholders with inflation. Veronique’s article explains why this might not be an attractive option, but I’ll add one further point. The European elite passionately favor centralization and the common currency is a symbol of centralization. As such, they will provide endless amounts of bailout money before allowing something that would be interpreted as a violation against their secular religion of “ever closer union.”

Real Spending Cuts – .0001 percent chance of meaningful reductions in the burden of government spending. Why do the right thing when you can get taxpayers from Germany, Netherlands, and other nations to subsidize your corrupt fiscal regime?!?

One of the biggest threats against global prosperity is the anti-tax competition project of a Paris-based international bureaucracy known as the Organization for Economic Cooperation and Development. The OECD, acting at the behest of the European welfare states that dominate its membership, wants the power to tell nations (including the United States!) what is acceptable tax policy.

For all intents and purposes, high-tax nations want to create a global tax cartel, sort of an “OPEC for politicians.” This issue is increasingly important since politicians from those countries realize that all their overspending has created a fiscal crisis and they are desperate to figure out new ways of imposing higher tax rates. I don’t exaggerate when I say that stopping this sinister scheme is absolutely necessary for the future of liberty.

Along with Brian Garst of the Center for Freedom and Prosperity, I just wrote a paper about these issues. The timing is especially important because of an upcoming “Global Forum” where the OECD will try to advance its mission to prop up uncompetitive welfare states. Here’s the executive summary, but I encourage you to peruse the entire paper for lots of additional important info.

The Paris-based Organization for Economic Cooperation and Development has an ongoing anti-tax competition project. This effort is designed to prop up inefficient welfare states in the industrialized world, thus enabling those governments to impose heavier tax burdens without having to fear that labor and capital will migrate to jurisdictions with better tax law. This project received a boost a few years ago when the Obama Administration joined forces with countries such as France and Germany, which resulted in all low-tax jurisdictions agreeing to erode their human rights policies regarding financial privacy. The tide is now turning against high-tax nations – particularly as more people understand that ever-increasing fiscal burdens inevitably lead to Greek-style fiscal collapse. Political changes in the United States further complicate the OECD’s ability to impose bad policy. Because of these developments, low-tax jurisdictions should be especially resistant to new anti-tax competition initiatives at the Bermuda Global Forum.

To understand why this issue is so important, here’s a video I narrated for the Center for Freedom and Prosperity.

And here’s a shorter video on the same subject, narrated by Natasha Montague from Americans for Tax Reform.

Last but not least, here’s a video where I explain why the OECD is a big waste of money for American taxpayers.